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Appliance Customer (Logistics/Supply Chain)
An Appliance Company with headquarters in Eastern European set up new operations in the U.S.A. to support their appliance customer. For the first two years of operation, the North American facility was dependent on the same European suppliers as their headquarter operations.
Supply chain issues, including lead times, minimum order quantities, and freight were hampering the productivity of the new U.S. operation. The main sourced component was a wire form welded assembly. Additional wire forms were also being bought from off-shore.
Wire Products Company quoted the components cost competitively. Their Tooling and Maintenance teams built an automated welding machine that would be dedicated to this customer. The key, however, was the offer of “local sourcing” that addressed their supply chain concerns.
Lead times were reduced significantly. A truck makes weekly milk runs between the two facilities. Picking up full shipping crates and returning empties for re-use. Minimum Order Quantities were also significantly reduced for the customer. With weekly deliveries, they took what was needed Just-In-Time, versus having to hold 3-4 months of component inventory.
As a local supplier with dedicated production equipment, Wire Products Company are able to handle any unexpected surges in demand. The customer also appreciated cost savings in freight, using LTL deliveries versus ocean bound containers and overland truck loads.
Side note – after the program settled into a nice routine, Wire Products Company collaborated with the customer on a cost savings opportunity to reduce the amount of wire in the welded assembly and saved them 15% per piece assembled.
